Kotak Mahindra Bank shares fall after KVS Manian resigns, Nuvama downgrade

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of Kotak Mahindra Bank Ltd. have opened 2.1% lower after the lender saw a top-level exit on Tuesday, just a week after the RBI restrictions on onboarding new digital customers and issuing fresh credit cards.

KVS Manian, recently elevated as Joint Managing Director, resigned with immediate effect on Tuesday. CNBC-TV18 had earlier reported citing sources that he is moving to Federal Bank and is one of the short-listed candidates as the new MD & CEO after incumbent Shyam Srinivasan’s term ends in September this year.

However, there is no official confirmation of the same. Federal Bank will be reporting its March quarter results today and also share future plans and new initiatives.

Brokerage firm Jefferies retained its “hold” rating on the stock with a price target of ₹1,970 per share. It said that it will watch for more senior and mid-management exits from the lender and if that happens, it can add to the drag from RBI restrictions.

Jefferies also said that senior level exits can affect the bank’s growth and valuations.

Nuvama has downgraded the stock to “reduce” citing back-to-back negative developments, from its earlier rating of “buy” and also cut its price target to ₹1,530 from ₹2,095 earlier.

The brokerage said that many senior exits have bunched up over six months and the recent changes shall hurt the lender’s growth and profit over the next 12-18 months.

Right after the stock began trading, 0.5% equity or 1.07 crore shares worth ₹1,677 crore changed hands in a block deal. Buyers and sellers in that transaction are not known yet.

Shares of Kotak Mahindra Bank fell 4% at the start of trade to ₹1,558.70. The stock is down 17% on a year-to-date basis.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow